UBS to Pay $19.5 Million to Settle Structured Note Allegations by SEC
Yesterday, the Securities and Exchange Commission (SEC) announced that UBS AG has agreed to pay $19.5 million to settle charges the Swiss banking giant made false or misleading statements and omissions in offering materials for structured notes linked to a proprietary foreign exchange trading strategy offered to US investors.
UBS, one of the largest issuers of structured notes in the world, agreed to settle the SEC’s charges that it misled U.S. investors in structured notes tied to the a currency index by falsely stating that the investment relied on a “transparent” and “systematic” currency trading strategy using “market prices” to calculate the financial instruments underlying the index, when undisclosed to investors, hedging trades by UBS a actually reduced the index price.
According to the SEC’s order instituting a settled administrative proceeding:
The SEC’s order found that UBS acted negligently by misleading investors through material misstatements or omissions in the offering documents. Without admitting or denying the SEC’s findings, UBS agreed to cease and desist from committing or causing any similar future violations, to pay disgorgement and prejudgment interest of $11.5 million, to distribute $5.5 million of the disgorgement funds to structured note investors to cover the total amount of investor losses, and to pay a civil monetary penalty of $8 million.
The experienced securities litigation attorneys at Colling Gilbert Wright & Carter have litigated and resolved hundreds of FINRA arbitration claims, many involving structured notes including those offered by UBS. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation.